1. Winter Wheat Corporation is considering buying a new tractor. Winter Wheat uses the Internal Rate of Return to make Capital Budgeting Decisions. The following information will be used:
   • Cost of Capital for Winter Wheat = 13%
   • Tractor Useful Life (length of project) = 8 years
   • Cost of Tractor = $55,668
   • Annual Reduction in Cost = $12,000

Calculate the Internal Rate of Return (note, NOT the IRR Factor, there is a difference) and determine if Winter Wheat will purchase the new tractor

A. IRR = 4.639; NO - DO NOT buy the tractor

B. IRR = 12.00; NO - DO NOT buy the tractor

C. IRR = 12.00; YES - BUY the tractor

D. IRR = 14.00; NO - DO NOT buy the Tractor

E. IRR = 14.00; YES - BUY the tractor